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New structure for Almanij / KBC Group

New structure for Almanij / KBC Group. Joint presentation by Almanij and KBC 23 December 2004. Visit www.kbc.com or www.almanij.be. Legal disclaimer. This presentation is intended for information purposes only.

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New structure for Almanij / KBC Group

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  1. New structure for Almanij / KBC Group Joint presentation byAlmanij and KBC23 December 2004 Visit www.kbc.com or www.almanij.be

  2. Legal disclaimer • This presentation is intended for information purposes only. • Neither the presentation nor any of the transactions referred to herein constitutes an offer of securities for sale or an offer to acquire or exchange securities. • The distribution of this presentation in certain jurisdictions may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions.

  3. Conference guidelines • This conference is being held on 23 December 2004 at 10.30 am CET. The presentation will be followed by a Q&A session for the press. The conference will be held in Dutch and simultaneously translated. • Participants who are present in the conference room may use channel 1 for the translation into French, 2 for the translation into English. • The live Webcast of this conference (audio or video broadcast) in Dutch, English and French may be accessed at www.kbc.com. Replay facility until 2 March 2005. • Alternatively, you can listen in on the conference (in Dutch, English or French) by dialling +32 2 290 1411, +44 207 162 0185 or +1 888 222 0364. Replay facility until 2 March 2005. • An additional conference call with aQ&A session for analysts and investors (in English) is scheduled for 1.30 pm CET (dial-ins: +32 2 290 1411, +44 207 162 0185 or +1 888 222 0364). Replay until 2 March 2005.

  4. W. BreeschKBCChairman J. HuyghebaertAlmanijChairman L. PhilipsAlmanijManaging Director A. BergenKBCDeputy CEO W. DuronKBCChief Executive E. Verwilghen KBLChief Executive

  5. Today’s agenda • Introduction and transaction highlights Willy Breesch • Transaction rationale and corporate governance Jan Huyghebaert • Strategic vision and unified management Willy Duron • Timetable and transaction structure Luc Philips • Value-drivers for the KBC Group André Bergen Appendices

  6. I. Introduction and transaction highlights Willy BreeschChairman of the Board of Directors, KBC Bank and Insurance Holding Company

  7. Proposed transaction • Streamlining of Almanij / KBC Group structure: • Unconditional public cash tender offer by Almanij for KBL shares (not yet owned by the Group) • Merger of Almanij and KBC (legal merger by way of the acquisition of Almanij by KBC) • Unified strategy and management The newly created company will be called 'KBC Group NV' and will continue to be listed on Euronext * Mr. J. Huyghebaert will be nominated as Chairman of the Board. Mr. W. Duron will be nominated as CEO. * Ticker code: KBC

  8. Proposed transaction Free float(approx. 30%) Core shareholders • Current: • Post-transaction: Almanij KBCBank & Insurance GevaertPrivate Equity KBLEuropean Private Bankers KBC Bank KBC Insurance KBCAsset Management Free float(approx. 47%) Core shareholders KBC Group NV KBCBank KBCInsurance KBCAsset Management KBL European Private Bankers Gevaert Private Equity Merger exchange ratio: 1.35 new KBC shares per Almanij shareOffer price per KBL share : 150 (ordinary) and 135 euros (preference)

  9. Key figures for the new KBC Group • Important financial Group in Euroland (top-10 in banking) with combined market capitalization of approx. 21 bn euros (and free float of 47%) • Combined shareholders’ equity of 12 bn euros and total assets of 277 bn euros (pro forma 30-Sep-04) • Combined consolidated net profit for the first nine months of 2004 of 1 210 m euros (pro forma)

  10. II. Transaction rationale and corporate governance Foto Jan HuyghebaertChairman and Managing Director, Almanij

  11. Anticipated transaction benefits • Increased transparency through simplified Group structure and governance • Unity of strategy, capital and management • Flexibility maintained to fully implement current strategy • Enhanced efficiency, with business synergies within the Group • Increased share liquidity, thanks to pooling of two listed entities and higher free float • Elimination of holding-companydiscount • Improved visibility on capital markets

  12. Shareholder stability Stake of core shareholders at a level slightly upwards of 50% Shareholderagreement (MRBB will become a party) Desire of Almanij’s current majority shareholders to maintain anchor of stability: • Committed to support long-term strategic development of the Group

  13. Corporate governance principles • Ensuring that company is run in best long-term interests of all shareholders • Compliance with good market practice, guided by new Belgian ‘Corporate Governance Code’ (in force as of 2005) • ‘One share, one vote’ principle • Non-executive chairman • Board sub-committees (Nomination / Remuneration / Audit) with significant role of independent directors • Protocol of ‘Executive Committee’ autonomy(within the framework of the general strategy defined by the Board) • Performing internal control and risk management • Regular and accurate disclosure to market on strategy and financials • High ethical standards, commitment to socio-environmental concerns

  14. III. Strategic vision and unified management Willy DuronManaging Director and CEO,KBC Bank and Insurance Holding Company

  15. Unified strategy • Tie private banking/private equity expertise into successful bancassurance model • Maintenance of core geographic focus on Belgium, CEE and private banking throughout Europe • CEE and European private banking network expected to remain long-term earnings drivers • Revenue and cost synergies through closer intra-group co-operation • Balanced risk profile through diversified business portfolio • Optimal capital allocation to support higher growth/profitability by activity/geographic area • Solid solvency levels and credit ratings • Maintenance of anchor of stable shareholders, guaranteeing continued independence and future strategic development

  16. Geographical presence in Europe Top-3-player in BelgiumRetail bancassurancePrivate bankingCorporate banking Top-3 bank/insurance player in CEE-5Czech RepublicHungarySlovakiaPolandSlovenia European private banking network:>100 locations across 9 other countriesFrance and MonacoGermanyItalyLuxembourgNetherlandsSpainSwitzerlandUK Selective corporate banking network:selective presence in 6 countries outside Belgium and CEEFranceGermanyIrelandNetherlandsSpainUK

  17. Activities of KBL european private bankers

  18. Unified management team • Appointment of Executive Committee at KBC Group level: • Main responsibilities: • Overseeing unity of strategic vision and execution • Group-wide risk and capital management • Financial planning and reporting • Shareholder relations • Supported by limited number of corporate functions • In start-up/transition phase, focus on: • Organization of central risk and capital management • Development of unified strategy on private banking, private equity and real estate activities • Group synergy projects

  19. Unified management team • Composition of ‘Group Executive Committee’: • Appointment of 3 Executive Directors: • Willy Duron (President and Group CEO) • André Bergen • Etienne Verwilghen • Additional members along business lines(appointment after start-up/transition period)

  20. Key financials • Balance sheet total: 277 bn euros (pro forma 30-Sep-04): • Capital: 12 bn - total risk equity: 21 bn • Customer deposits: 164 bn – customer loans: 104 bn • Technical provisions, insurance: 16 bn • Net profit: • Pro forma 2003: 1 304 m euros (ROE: 12%) • Pro forma 9M04: 1 210 m euros (ROE: 14%) • Solvency levels (pro forma 30-Sep-04): • Tier 1, banking: 9.5% • Solvency margin, insurance: 341% • Headcount: ca. 52 000 - customers: ca. 11 000 000 • Credit ratings expected to remain at current levels

  21. IV. Timetable and transaction structure Luc PhilipsManaging Director, Almanij

  22. Expected transaction timetable * * Indicative calendar

  23. Rationale behind tender offer for KBL Logical step in streamlining Group: operational entities to be held by integrated listed company ‘Liquidity window’ for KBL shareholders to exit prior to the creation of the new Group (delisting of KBL will be applied for) Prior to the merger, Almanij will make an unconditional cash offerfor KBL shares

  24. Legal highlights • Almanij’s cash bid for KBL shares: • Public tender offer (Luxemburg-issued prospectus) • Aim to acquire as many shares as possible (N.B.: a delisting will be applied for) • Offer for both the ordinary and preference shares • No additional external funding required (activation of existing Commercial Paper programme) • Mergerof Almanij and KBC: • Merger by way of acquisition of Almanij by KBC • Almanij shareholders will receive new 'KBC Group shares' (no cash consideration), entitled to dividend as of 01-Jan-04 • Merger report is available as of 1 month prior to the EGMs • Relevant EGM voting procedure: 50% of share capital represented and 75% approval by the attending shareholders of the two companies

  25. Valuation highlights • Market practice methodology, based on 30-Sep-04 figures • Bid price for KBL: • Ordinary shares: 150 euros/share (premium of 10.3% to average market price of last 3 months to 20-Dec-04*) • Preference shares: 135 euros/share (premium of 16.3% to average market price of last 3 months to 20-Dec-04*) • Merger considerations: • Exchange ratio: 1.35 (27 KBC shares for 20 Almanij shares, bringing the no. of KBC shares from 310 710 645 to 366 284 665) • For comparison: * For practical reasons, closing prices of 20-Dec have been used for comparison purposes** Last trading day before announcement of examination of Group structure on 22-Nov-04 ** KBC at market price and Almanij at intrinsic value calculated as the “roll-up” of the underlying stakes using market prices for quoted ones

  26. Change in group structure • Current situation: CERA/Almancora37.9% MRBB16.6% Other committed shareholders 15.8% Free float28.7% Almanij NV 71.9% * 67.2%* 100% KBC KBL Gevaert * Excluding intragroup cross holdings and possible ATO conversion

  27. Change in group structure • Post-transaction: CERA/Almancora27.3% MRBB12.0% Free float46.6% Other committed shareholders 11.4% KBC Group(Own shares : 2.5%*) 100% 100% 100%** 100% to 100% KBC Bank KBC Insurance KBC AM KBL Gevaert * Including 1.5% ESOP hedge in KBC Group NV ** Directly and indirectly

  28. Other shareholder information • Transactions subject to final approval of supervisory authorities in Belgium and Luxemburg (expected Jan/Feb-05) • Merger reports are available as of one month before EGM’s (the latter are expected for 02-Mar-05) • Proposed legal status of shares of (new) KBC Group same as current KBC shares • On merger, no material changes to be made to articles of association of KBC • After this announcement, the existing (and approved) share repurchase programmes may be reactivated

  29. V. Value-drivers for the KBC Group André BergenManaging Director and Deputy CEO,KBC Bank and Insurance Holding Company

  30. Value-drivers for KBC group Continued operational stability 1 2 Enhanced efficiency, with business synergies 3 Greater free float and increased share liquidity 4 Improved visibility in capital markets 5 Consistent dividend policy

  31. Continued operational stability • Robust value of existing business portfolio on the back of: • KBC’s sound fundamentals: • Strong competitive position in Belgium • Solid franchise in CEE • KBL’s low-risk revenue stream from private banking activities: • Strong wealth-management expertise • Pan-European network • Existing experienced management team and employees to deliver on strategic ambitions and financial targets • Balanced risk profile through diversified business portfolio • Optimal capital allocation to support growth and profitability, while aiming to maintain solid solvency levels and credit ratings • Shareholderstability will guarantee continued independence and future strategic development

  32. Enhanced efficiency, with business synergies • New structure enabling unified strategy and, where relevant, integrated operations • Synergy potential: • Additional revenue growth based on complementarities of product ranges, brand names and geographical presence • Cost savings based on overlapping functions and activities • ‘Synergy projects’ to be launched in the fields of: • Risk and capital management and other relevant corporate functions • Private banking business (activities of KBC Bank and KBL) • Private equity management (activities of KBC Bank and Gevaert) • Real-estate activities (activities of KBC Bank and Gevaert) • Support functions

  33. Greater free float and increased share liquidity KBC (old) Almanij KBC (new)e • With expected market cap of approx. 21 bn euros, among top 10 banking shares in Euroland • Increased weighting in stock indices due to greater free float • Expected further expansion of (equity) research coverage * Average of 6 months to 20-Dec-04

  34. Elimination of holding company discount Almanij’s historic holding company discount * Average: 25% * Difference (in percentage terms) between market value and intrinsic value based on SOP at market value** Last trading day before announcement of examination of Group structure on 22-Nov-04

  35. Improved visibility in capital markets Euroland top-30 banks, ranking by market cap * KBC Group : approx. 21 bn euros * DJ Eurostoxx banks constituents as at 20 December 2004 (estimate for KBC Group)

  36. Consistent dividend policy • To continue the past policy, and supported by its strong solvency and enhanced profitability, KBC Group intends to pay out a steadilygrowing dividend • Historical (gross) cash dividend per share: Almanij (4-yr CAGR: 9%) KBC (4-yr CAGR: 7%) EUR EUR

  37. New structure for Almanij / KBC Group The floor is now open for questions from the Press Reminder: a Q&A session for investors and analysts (conference call in English) will be held later today at 1.30 pm CET. Dial-ins: +32 2 290 1411, +44 207 7162 0185 or + 1 888 222 0364. …/…

  38. Q & A panel

  39. Appendices

  40. Ownership analyses - current situation N° of shares (000) Holding in Almanij Holding in KBC

  41. Ownership analyses - projected situation N° of shares (000) Holding in KBC Group

  42. Pro forma P&L, KBC Group, 9M 2004 Pro forma segments Total (m euros) 30-Sep-04 Bankingbusiness Insurancebusiness Holding Co & other

  43. Pro forma B/S, KBC Group, 30-Sep-04 30-Sep-04 Pro forma segments Total (bn euros) Bankingbusiness Insurancebusiness Holding Co & other * B/S total, excl. eliminations

  44. Pro forma P&L, KBC Group, 2003 31-Dec-03 Pro forma segments Total (m euros) Bankingbusiness Insurancebusiness Holding Co & other

  45. Pro forma P&L, KBC Group, 2002 31-Dec-02 Pro forma segments Total (m euros) Bankingbusiness Insurancebusiness Holding Co & other

  46. Contact information • Press contacts: • KBC Press Office:Tel. +32 2 429 85 45 – viviane.huybrecht@kbc.be • Almanij Press Office:Tel. +32 3 202 8714 – philippe.verly@almanij.be • Investor relations: • KBC Investor Relations Office:Tel. +32 2 429 4051 – investor.relations@kbc.com • Almanij Investor Relations Office:Tel. +32 3 202 8713 – investor.relations@almanij.be www.kbc.com or www.almanij.be

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